Musk’s xAI Could Face Lawsuit Over Air Pollution

Today’s ESG Updates

• NAACP threatens legal action against xAI: The civil rights group claims xAI’s data center is worsening air quality in Memphis and violating pollution standards.
• Australia unveils sustainable finance taxonomy: A new classification system aims to combat greenwashing and align corporate practices with national net-zero goals.
• Brazil’s oil ambitions test climate commitments: Plans for offshore drilling raise alarms over ecosystem risks and the credibility of Brazil’s net-zero agenda.
• Coalition with $9.5 trillion in assets demands forest protection: A new report calls for investors to phase out corporations that contribute heavily to deforestation.

xAI could face legal action from NAACP over Memphis air pollution

Last June, Elon Musk opened an xAI data center in Memphis, Tennessee, in the United States. Since its opening, air pollution has gotten worse in Memphis. While clean, renewable energy is the goal for AI data centers in the future, this is not currently a reality. The center in Memphis utilizes methane gas turbines that release potent greenhouse gases into the atmosphere. The National Association for the Advancement of Colored People (NAACP), with the help of the Southern Environmental Law Center (SELC), sent a letter to Elon Musk threatening to sue over these environmental concerns. The SELC states that the company has installed 35 turbines without obtaining the necessary permits and is disregarding available pollution control methods. 

***

Further reading: NAACP threatens to sue Elon Musk’s xAI over Memphis air pollution

Australia releases new sustainable finance taxonomy system

The Australian Sustainable Finance Institute (ASFI) just launched its new sustainable finance taxonomy system. This classification tool will assess whether a business entity’s actions align with its climate commitments. Building on the European Union’s taxonomy system, Australia has added critical sectors, ranging from agriculture to mining and minerals. The new system coincides with the country’s commitment to net-zero targets. Kristy Graham, the CEO of ASFI, said, “The release of the taxonomy marks a transformative moment for Australia’s sustainable finance market and a key achievement under the Australian Government’s Sustainable Finance Roadmap.” This taxonomy will mitigate corporate greenwashing and increase transparency, key factors in sustainable investing. 

***

Further reading: Australian Sustainable Finance Taxonomy

Offshore oil sparks debate about Brazil’s net-zero policy

Research into oil drilling has sparked a huge national debate in Brazil. President Luiz Inácio Lula Da Silva has made his climate goals very clear, stating in 2023, “Our goal is zero deforestation in the Amazon, zero greenhouse gas emissions.” He currently appears to contradict these claims, as the government is exploring the possibility of offshore drilling along the northeast coast. Many, including President Lula, believe that oil is crucial to the country’s financial future and prosperity. The President himself said, “We need to use it to fund our energy transition, which will require a lot of money.” Experts argue that the area where the Atlantic meets the Amazon, also known as the Equatorial Margin, has a complex and vulnerable ecosystem that would be compromised if drilling were to begin. 

***

Further reading: In Brazil, a fight over offshore drilling tests Lula’s climate ambitions

Coalition worth $9.5 trillion in assets calls for an end to deforestation

The Net-Zero Asset Owner Alliance (NZAOA), a coalition of insurance companies and pension funds, is taking steps to ensure that investors are not enabling deforestation. The coalition’s portfolios have combined assets of $9.5 trillion. The NZAOA published a report calling on investors to “phase out” industries that have been proven harmful to forests by 2030. Companies producing coffee, rubber, or beef fall under this category. Tamsin Ballard, Chief Investor Initiatives Officer at Principles for Responsible Investment, said that the report underscores “the absolute linkage between climate change and deforestation.” The report also urges investors to exert pressure on companies within their portfolios to increase transparency.

***

Further reading: Asset Owners With $9.5 Trillion Call for Stopping Deforestation

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit:  Tara Winstead